Readings for the Next Lectures

Transcription

1 Readings for the Next Lectures Readings for the next lectures: Bocquet-Appel, Jean-Pierre (2011), When the World s Population Took Off, Science On Friday, we will talk about the referee report details. J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

2 How does this relate to the first several thousand years? So what does growth accounting tell us about the pre-industrial world? Generally, it tells us what to look at: technological change, capital per worker, land per worker It tells us that modern growth is largely about technological change It also shows that population growth tends to hold back income growth In our look at the pre-industrial world, we ll try to identify why we didn t achieve sustained growth This will (hopefully) tell us what had to change to enter the modern world J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

3 How does this relate to the first several thousand years? One quote from Abramovitz to keep in mind: This result is surprising in the lopsided importance which it appears to give to productivity increase, and it should be, in a sense, sobering, if not discouraging, to students of economic growth... J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

4 How does this relate to the first several thousand years? One quote from Abramovitz to keep in mind (continued): Since we know little about the causes of productivity increase, the indicated importance of this element may be taken to be some sort of measure of our ignorance about the causes of economic growth... J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

5 Technological Change and the Pre-Industrial World A quick answer to stagnant standards of living in the pre-industrial world is that we simply didn t have technological change The quick response to this quick answer is, That s ridiculous. There were incredible changes in technology before the industrial revolution. Think of what the world was capable of in 3000 B.C. versus what it was capable of in 1600 A.D. J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

6 The Pre-Industrial World s Greatest Hits Prometheus Carrying Fire, Jan Cossiers, 17th century J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

7 The Pre-Industrial World s Greatest Hits J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

8 The Pre-Industrial World s Greatest Hits Gary Larson, The Far Side J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

9 The Pre-Industrial World s Greatest Hits J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

10 The Pre-Industrial World s Greatest Hits J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

11 The Pre-Industrial World s Greatest Hits Antikythera mechanism fragment J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

12 The Pre-Industrial World s Greatest Hits Antikythera mechanism schematic J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

13 The Pre-Industrial World s Greatest Hits J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

14 Technological Change and the Pre-Industrial World The pre-industrial world is full of big, big innovations The structure and capacity of the economy was transformed multiple times in dramatic ways Yet these changes didn t have lasting effects on the standard of living We ll explore three specific moments in history to try to understand this: The neolithic revolution The black death European shipping empires J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

15 Explaining Pre-Industrial Stagnation Before we get to the actual test cases, we re going to build a conceptual framework to make some predictions What we need is a model that ties together standard of living and technology Standard of living is going to depend on not only how much we produce, but how many people we divide it between (note Kenya on the previous tables) So our model also needs to take into account population change What does population change look like? J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

16 Population in the Modern World First, a few definitions: Crude birth rate: annual number of births per thousand population Total fertility rate: average number of children born to a woman over her lifetime if (1) she experienced current age-specific fertility rates and (2) she survived from birth to the end of her reproductive career Replacement fertility: total fertility rate at which population levels are sustained (2.1 births per woman in developed countries, 2.5 to 3.3 birth per woman in developing countries, 2.33 globally) J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

17 Population in the Modern World First, a few definitions (continued): Gross reproduction rate: average number of daughters born to a woman over her lifetime assuming if (1) she experienced current age-specific fertility rates and (2) she survived from birth to the end of her reproductive caree Net reproduction rate: average number of daughters born to a woman over her lifetimes assuming she experienced current age-specific fertility rates but accounting for mortality (a rate of 1 would mean no population growth) J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

18 Population in the Modern World 8 Total fer*lity rate Africa Asia Europe La8n America and the Caribbean Northern America Oceana J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

19 Population in the Modern World Total fer*lity rate High- income countries Middle- income countries Upper- middle- income countries Lower- middle- income countries Low- income countries 0 J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

20 Population in the Modern World Population growth in the United States, Year Population (in thousands) Surviving children per woman , , , , , , , , , J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

21 Population in the Preindustrial World Location Population in 1300 Population in 1800 Surviving children per woman Norway Southern Italy France England Northern Italy Iceland Note: population is given in millions. J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

22 The Malthusian Trap The Reverend Thomas Robert Malthus J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

23 The Malthusian Trap Essay on the Principle of Population, 1798 J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

24 The Malthusian Trap A basic but powerful framework was proposed in the late 1700s by Thomas Robert Malthus, built upon two basic principles: First, That food is necessary to the existence of man. Second, That the passion between the sexes is necessary and will remain nearly in its present state. J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

25 The Malthusian Trap These two basic principles lead to societies being trapped at a particular standard of living. According to Malthus: Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio...this implies a strong and constantly operating check on population from the difficulty of subsistence. J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

26 Explaining Stationary Populations One of the key differences between the preindustrial world and the modern world was that population size was pretty much static Malthus helps provide a very simple economic argument for why this was the case that we ll try to formalize The argument depends on three assumptions about how preindustrial economies worked: Each society had a birth rate increasing with living standards Each society had a death rate decreasing with living standards Living standards decline as population increases J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

27 The Birth Rate Schedule The birth rate is just the number of births per year per thousand people For example, there were 4,059,000 births in the United States in 2000 and the US population was 281,421,906: b 2000 = = 14.4 We assume that in the preindustrial world, birth rates rose with material living standards Why? A wealthier family could better afford an additional child, a healthier woman was more likely to have a successful pregnancy,... J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

28 The Birth Rate Schedule J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

29 The Death Rate Schedule The death rate is just the number of deaths per year per thousand people For example, there were 2,403,000 deaths in the United States in 2000 and the US population was 281,421,906: d 2000 = = 8.5 We assume that in the preindustrial world, death rates fell with material living standards Why? Higher levels of consumption (better food, clothing, shelter, etc.) helps you live longer J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

30 The Death Rate Schedule J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

31 Stationary Population Notice that for our US figures, the birth rate was 14.4 births per 1,000 people per year and the death rate was 8.5 deaths per 1,000 people per year This means that each year, more people are being born than are dying so population must be growing Recall that the preindustrial world had almost no population growth So in the preindustrial world, the birth rate roughly equaled the death rate (the income per person at which this occurs is called the subsistence income) J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

32 Stationary Population J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

33 Stationary Population But why a stationary population? Because of the technology curve relating population to income per person With some resources fixed (for example land), the marginal product of an extra person is positive but smaller than the marginal product of the previous person This means that while total output increases as population increases, it increases at a slower rate than population J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

34 Diminishing Marginal Product of Workers J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

35 The Technology Curve J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

36 The Malthusian Equilibrium J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

37 Moving to the Malthusian Equilibrium Suppose we were at an income per person greater than the equilibrium level Then births would exceed deaths leading to population growth As the population grows, we move up and to the left along the technology curve This leads to lower income per person increasing the death rate and decreasing the birth rate Things stop moving once the birth rate equals the death rate J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

38 Moving to the Malthusian Equilibrium J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

39 Moving to the Malthusian Equilibrium Notice that equilibrium income per person had nothing to do with the level of technology Equilibrium income per person is determined entirely by the birth rate and death rate The technology curve mattered for two reasons: The downward slope told us how income per person would change if the population was growing or shrinking The position determined the equilibrium population level J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

40 The Effects of a Change in Technology Suppose that there is an improvement in technology (we invent the wheel). What happens? The advance in technology will shift the technology curve to the right In the short run (before population adjusts), this means greater income per person Births will rise, deaths will fall and the population will grow The economy returns to the old income per person only at a new higher population So an improvement in technology can allow for greater population density but doesn t improve average income per person J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

41 The Effects of a Change in Technology J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

42 The Effects of a Change in Technology J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

43 The Effects of a Change in the Birth or Death Schedules A shift in the birth or death schedules can change equilibrium income per person. Suppose that the plague comes along, what happens? The rise in disease will shift the death rate curve up (more deaths at any given income level) At the current income per person, deaths will now outnumber births and the population will decrease As the population decreases, income per person will rise until deaths once again equal births The economy settles at a new higher income per person and a new lower population J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

44 A Shift in the Death Rate Curve J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

45 The Effects of Change in the Birth or Death Schedules Now let s think about a shift in the birth schedule. Suppose that Viagra finds its way to a preindustrial economy: There will be an increase in births at any given income level, shifting the birth rate curve up At the current income per person, births now outnumber deaths and population will grow As the population grows, income per person will start to fall until births once again equal deaths The economy will end up in a new equilibrium with a lower income per person and a higher population than the old equilibrium J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

46 Change in the Malthusian World The birth and death rate curves determine the subsistence income The technology curve determines the population size based on this subsistence income A change in technology can lead to a different population size in the long run but not a different subsistence income A change in the birth rate or death rate curve is the only way to change the long run subsistence income J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47

47 Subsistence income in the Malthusian World Features of a society that would lead to a higher subsistence income: Low fertility rates: Late age at first marriage Small families being a social norm Greater diffusion of contraceptive practices High death rates: Bad disease environment Poor health practices High levels of violence Better technology just means greater population density in the long run J. Parman (College of William & Mary) Global Economic History, Spring 2017 January 25, / 47